Abstract

References (32)

Using the URL or DOI link below will
ensure access to this page indefinitely

Based on your IP address, your paper is being delivered by:

New York, USA

Processing request.

Illinois, USA

Processing request.

Brussels, Belgium

Processing request.

Seoul, Korea

Processing request.

California, USA

Processing request.

If you have any problems downloading this paper,please click on another Download Location above, or view our FAQFile name: SSRN-id779005. ; Size: 59K

You will receive a perfect bound, 8.5 x 11 inch, black and white printed copy of this PDF document with a glossy color cover. Currently shipping to U.S. addresses only. Your order will ship within 3 business days. For more details, view our FAQ.

Quantity:Total Price = $9.99 plus shipping (U.S. Only)

If you have any problems with this purchase, please contact us for assistance by email: Support@SSRN.com or by phone: 877-SSRNHelp (877 777 6435) in the United States, or +1 585 442 8170 outside of the United States. We are open Monday through Friday between the hours of 8:30AM and 6:00PM, United States Eastern.

The Economic Implications of Outsourcing

For a developing economy such as India with a large pool of trained manpower outsourcing represents a huge economic opportunity. In the West there has been considerable media led agitation against outsourcing due to the unemployment it causes. The key point is that jobs created by outsourcing are not really in Indian hands. It becomes imperative to understand what the political and economic imperatives are governing outsourcing in the West. If political conditions in the West turn adverse towards outsourcing it is likely to lead to protectionist tendencies and restrictions on companies outsourcing to India.

This paper examines the economic implications of outsourcing within the context of the standard Ricardian Comparative Advantage framework. An attempt is made to identify what are the benefits and costs of outsourcing to both the US and India both theoretically and empirically. Key predictions from trade theories are identified and the analysis distinguishes between losers and gainers both in the short and medium run. This is further explored by looking at the evidence regarding employment and outsourcing trends in the US and identifying future trends in outsourcing. The implications of increased protectionist tendencies in the West for growth, and outsourcing are also explored.